The MacNeil/Lehrer Report; Unemployed Graduates

ROBERT MacNEIL: Good evening. Unemployment continued to creep downwards in May. The Labor Department said today that the rate of joblessness dropped by one tenth of a percent from April to 10.1% of the workforce. The better news from the statistics was that the number of total civilian jobs the country has to offer has grown in the past two months by 650,000. Despite that improvement, some 11.2 million Americans are still looking for work; another 1.8 million have stopped looking. According to the President's chief economist, Martin Feldstein, the May figures are more evidence that we are in a solid recovery. But there is one group of job seekers that the recovery isn't reaching, college graduates. Authorities everywhere say graduates this year are facing the bleakest job market in decades, even worse than last year at the depth of the recession. One national survey shows job offers to seniors cut by half since last year. Tonight, if the economy is improving, why are things tougher than ever for the best educated of America's youth? Jim?

JIM LEHRER: Robin, every year for the last 10 years some 200,000 of the nearly one million young Americans who graduate from college graduate into a problem. They either don't find work at all, or they end up taking jobs which do not require a college education to perform -- underemployed, it's called. The end result is an unemployed, underemployed labor pool of college graduates right now that already exceeds two million, and it's expected to continue to grow by another 200,000 or so this year, the same the next, and so on for another 10 years at least. Their problems, of course, create the same one for those without college diplomas. Jobs they were expecting are now being taken increasingly by college graduates, and the cycle of misery and frustration passes down and on. Robin?

MacNEIL: First we talk to a college graduate who has been looking for work for the past two years. He is Duane Nealon, who spent two years in the Marine Corps, then worked his way through college to get a degree in urban planning and land management from the State University of New York in 1981. Mr. Nealon, describe your efforts to find work.

DUANE NEALON: Well, I'd say for the past year and a half to two years I've done extensive resume submissions; I've scanned the want ads, like everyone. I've --

MacNEIL: How many resumes have you sent out?

Mr. NEALON: Iwould say no more than 1,500. I would say that not only have I mailed them out, which adds additional cost; I've hand-carried them, I've done extensive traveling throughout the East Coast. And I've done quite a bit of probing.

MacNEIL: What reasons are you given for not being offered jobs in the area of your skill?

Mr. NEALON: Well, when reasons are given -- very few times have I received some word on why exactly I haven't received a job. I'll give you the latest example. After a month and a half wait at Flatbush -- the community development agency in Flatbush, I was given the reason that I didn't have extensive experience in tenant-landlord relations, which I felt I did, but not "extensive", whatever the meaning of extensive is.

MacNEIL: In other words, they were looking, and could afford to wait or look for somebody with just a lot more job experience besides the college degree you have?

Mr. NEALON: Oh, most definitely. On every job interview I've gone for not only were there several people there; there were 50, say, 50 or more people seeking the same position. And with much better job skills, job qualifications than I have at this point of my career.

MacNEIL: What kind of work are you willing to take in this situation?

Mr. NEALON: Well, I'm willing to work anything, but I find a lot of times when I seek Jobs that I'm qualified for, but overly qualified, say, for a waiter's position or a messenger position or painting or some menial work, that I'm looked upon as overqualified or as a temporary person that would probably jump at the first opportunity for an alternative, more professional job.

MacNEIL: So they don't want you for that reason?

Mr. NEALON: Exactly. Exactly. And then when I seek out a position for a professional position, I find that I'm in the same job level as a person with 10 or more years experience. So it's a double whammy where I'm overqualified for jobs that I seek in earnest, even though how menial they may be, and then when I do get the opportunity to go on a job interview for a professional position, I'm met in the lobby by people with 10 or more years experience with much better qualifications.

MacNEIL: What are you going to do?

Mr. NEALON: Well, I'm not qualified for unemployment. I could have filed maybe four months ago and then gotten unemployment, but I've worked in and out. I think I'm going to go to the West Coast; I've just about exhausted the East Coast. There's wealth there. There's the public welfare or social services, but I don't really want to do that either; that's almost a point of giving up, and I don't really want to do that at this point. I've tried being selfemployed. I've worked out things from changing tires to painting buildings and washing floors. I'd do just about anything. I've also done professional projects that I've been able to beat out of the bush. I've done advocacy work and things like that. I've even volunteered my services on a professional level to some of the communities in the New York City area.

MacNEIL: Just to get a bit of experience and --

Mr. NEALON: Exactly. To keep my resume up to date and filled and just to show that I've earnestly sought work.

MacNEIL: Do you now -- you worked your way through college, didn't you?

Mr. NEALON: Yes, I did. Every opportunity I've had to work. I worked hard in college and worked all the way through.

MacNEIL: Do you now regret having worked so hard for that degree?

Mr. NEALON: No, because I selected my profession based on a need that was out there. I didn't select a job based on some monetary return. I based it on a need that I felt was out there, say, housing and community development, which I would want to practice not only exclusively in the nation or a particular state, but anywhere in the world. I've sought out employment in the Peace Corps on a volunteer basis. So I have no regrets and I'll continually work and strive for a professional position and won't give it up. I have worked too hard for it and I want it and I'll get it eventually.

MacNEIL: Thank you. Jim?

LEHRER: Finding jobs for college graduates is the full-time job of Victor Lindquist. He's dean of placement services at Northwestern University in Evanston, Illinois. He also authors the Endicott Report, which surveys hiring and salary trends for college students nationally. He joins us tonight from Chicago. Dean, how would you describe the situation this year for graduates?

VICTOR LINDQUIST: Well, the President calls it a recession. I think it's a major depression because there have been so many of our graduates that have not been able to find the opportunities that they expected to locate three, four years ago.

LEHRER: Mr. Nealon's story that we've just heard is not a rarity, in other words?

Dean LINDQUIST: Well, I think his is somewhat industry-specific in that there has been a shifting in priorities from government -- at the federal level in Washington to development of the urban areas into the defense area. I think it's symptomatic now that the defense industry is hiring at record levels, and they are certainly not doing very much in the social service area.

LEHRER: Is the social service area or areas related to the one Mr. Nealon is interested in, is that the one that's hurting the most right now?

Dean LINDQUIST: I would say it's certainly one of the most difficult -- construction and the smokestack industries have run into difficulty, and yet there are periods where we see just glinches of hope that we have not seen real fulfillment on yet.

LEHRER: Like what?

Dean LINDQUIST: Well, the defense contractors have come again and again and again to the campus. Some of the service industries are beginning to break because they're beginning to believe what's happening in terms of the recovery. But it's not pervasive enough to want to make book on it yet.

LEHRER: Well, what kind of people are the defense industries looking for?

Dean LINDQUIST: Well, I would not confine it just to defense. I would say high-tech -- the engineering disciplines in electronics or electrical engineering. Computer science is practically a golden degree. The mechanical engineer has had a good run at it. And I think the baccalaureates in accounting have found a good demand for their services, provided they have done well in school

LEHRER: When you say the situation now is a depression, can you explain what you mean by that in terms of how it relates to -- you've been in this business a long time, I assume. Relate it in some way.

Dean LINDQUIST: Well, I haven't seen anything like this in 25 years, and that includes the period when I got out of school, and that wasn't the best of times, either. But we have had two straight years where there's been a decline of the demand for college graduates and I don't expect it's going to be any better for the next six months.

LEHRER: Is there any difference based on where a young person went to school? In other words, are the graduates of the "best schools" having less problems than the graduates of the less best schools and so on?

Dean LINDQUIST: I think that is a fair statement, that the graduates of the better colleges who have done well in school are faring better. We've seen graduates at Northwestern that have come out with 3,5 and better. I knew of one young lady who --

LEHRER: Three -- that's 3.5 grade average out of a possible four, right?

Dean LINDQUIST: Yes, it'd be a good solid B-plus or an A-minus. -- who took 10 job interviews and got four offers, none less than $21.000. On the other hand, I had one student who is going to graduate probably the Phi Beta Kappa and has been admitted to Northwestern, Columbia, Harvard and Yale law school who had 40 letters of rejection before he found the right opportunity through our office.

LEHRER: Well, what kind of work was he trying to get?

Dean LINDQUIST: He was trying to get into investment banking.

LEHRER: What do you tell these young people when they say, "Hey, Dean, what am I going to do? I worked all this time; I've got my little college degree, now I can't find a job." What do you advise them to do?

Dean LINDQUIST: Well, we have resorted perhaps to some half-neat expressions, but when it gets tough, that's when the tough get going, but --

LEHRER: I've heard that one before.

Dean LINDQUIST: Yeah, right. I think anyone who has been in journalism would realize that. But it's now I think more widespread than it has been in the past, and that we have taken the students in and tried to give them some access to markets which are beyond the college campus.We are hoping that they will go out and explore the second tier of companies, not necessarily the Fortune 500 or the Fortune 1000, but be a little more creative in their approach and use what resources they have to their avail

LEHRER: And, finally, do you tell them to do what Mr. Nealon has done, which is to take any kind of job he can get?

Dean LINDQUIST: Well, I think he should perhaps look for a job in the industry. The situation which I would like to share with my own students and perhaps with the audience is that if you are attempting to be in the major leagues, it's far better to be sitting on the bench, even as a batboy, than it is to be looking through the picket fence out in left field. At least you're acquiring some experience. You're acquiring some knowledge. You're being familiar with the jargon. You know something about the organization. And being there gives you visibility which you could not otherwise obtain.

LEHRER: Thank you. Robin?

MacNEIL: Next a man who has been studying this problem for years. He is Richard Freeman, professor of labor economics at Harvard, currently a visiting professor at the California Institute of Technology. Mr. Freeman has written three books on the job prospects facing college graduates, including The Overeducated American, published in 1976. Prof. Freeman, how do you explain the bleak job prospects facing college graduates?

RICHARD FREEMAN: The main cause is the substantial increase we've had in the number of college graduates. We expanded our higher educational system to unprecedented levels beginning in the '60s, and these people graduated in the '70s and '80s and so we've had a huge increase in the number of the supply of people. We had no such expansion in the number of jobs for them. Indeed, in some of the key sectors of the economy, where we traditionally hire college graduates -- school teachers, government bureaucracies -- we've not had an increase -- very much increase in employment at all. Indeed, school teaching is a bad area.

MacNEIL: Does that mean -- and part of that increase in college places was due to the daby boom that came through, the age group that came through. Now that that has ended, does that mean the situation is all going to be all right again? Prof. FREEMAN: I think the situation will improve in the future because we're going to get smaller classes of college graduates coming through. Now, for the current group of people, though, they're still going to be members of this huge baby boom generation; they're still going to be competing with lots of their peers for jobs. And for them I don't see any great improvement in the situation in the future.

MacNEIL: How much has the current recession of the last 2 1/2 or three years contributed to this situation?

Prof. FREEMAN: It's not been that big a factor. While we're talking about it today and this year and lest year have been especially bad, this really has been a decadal problem. It began early in the '70s and got worse, and what you see -- Mr. Nealon faces the problem. People with more experience competing for the same job as him. They're the college graduates from 1973 and '74 and '75.

MacNEIL: Who are just backed up through the system? Prof. FREEMAN: That's right. So we've got a big backlog and it sort of seems to have hit most severely this year and last year.

MacNEIL: Talking about recent events again, how much is the trend one reads about for industry to be cutting back on middle management -- white collar positions -- either to make themselves leaner for economy or because of much more computerization of that, how much is that contributing to this?

Prof. FREEMAN: That's a factor, but I would still put the greatest stress upon the supply of young people coming out and the backlog. As the recession comes to an end, hopefully, we begin to get a good recovery, you'll see that besinesses will again begin begin putting on people in their middle management and so on, and that will disappear as a factor.

MacNEIL: I see. Are American colleges producing the wrong mix of skills for the country?

Prof. FREEMAN: well, they are in some respects, yes. I mean, we've seen a huge increase in the number of people going into engineering. Today, as was pointed out, it is a very good area to go into. Well, I think we have somewhere on the order of 110.000 freshman engineers coming into last year's class. They will graduate four years from now, and that will be an incredible number of people seeking jobs in engineering. Now, unless the defense and the space industries expand incredibly in the next four years, that crop of people will have a big difficulty. We've already begun seeing problems of shortages of school teachers because the school teacher market was so bad in the mid-'70s and no young people wanted to go into that field. So we have had some problems of mix.

MacNEIL: What are the positive signs you see that may improve this?

Prof. FREEMAN: Well, one obviously, if the economy really comes out of this recession -- we have had a long, long period of slack growth. Two is we are going to see smaller numbers of college graduates because we are seeing smaller classes come in. And those are the main factors I would look at.

MacNEIL: What about the -- what about the -- you mentioned the teaching profession a moment ago. There's a great hue and cry about the quality of teachers and everything at the moment. If there are so many college graduates going around without jobs, will any of them be content to go into teaching, which they scorned before?

Prof. FREEMAN: Oh, I wouldn't say that so much they scorned teaching. Teaching scorned them, and they knew they were not going to get jobs as teachers so they didn't go into the field. I think once the teaching market improves beyond just, you know, words, and we really see salaries begin to go up a little bit, that you will see young people flocking back into the teaching area. And one of the key things I think we've seen in the last decade is that the young students just follow what the job market tells them. If the job market is telling them, "Go into school teaching, that's a good field," they go into it. Sometimes they go into it in numbers that are just too big for what eventually occurs, but they are very responsive to the incentives from the society.

MacNEIL: Thank you. Jim?

LEHRER: Another man who has given a lot of thought and study to this problem is Joseph Froomkin, an economist and consultant in the areas of labor and education. He was an assistant U.S. commissioner of education in the '60s and later directed the Policy Research Center for the Higher Education Society. What's your analysis of what's caused this deterioration in the jobs available to college graduates?

JOSEPH FROOMKIN: I agree with Professor Freeman that we had a tremendous expansion in college attendance, a tremendous expansion in college graduation, and suitable jobs did not grow fast enough to absorb all those people. This is something which has happened since the 1970s. During the 1970s, around 20% of the new graduates did not get suitable jobs. Last May, 1981, in a special survey of the U.S. Department of Education, the figures showed that one out of three college graduates did not get a suitable job, and that the proportion was as high as one out of two in humanities and the social sciences. There are just too many people with college education for the managerial, professional and high level sales jobs in this country.

LEHRER: Is that a result of somehow wrong expectations or expectations that are too high?

Dr. FROOMKIN: It is the result of two things, in my opinion. One of them is that lots of people can afford the college education or at least struggle enough to pay for it, and a college education is becoming more and more like a decision to buy a new car. If you want to drive it just to work you don't need it, but if you expect to get some status, some joy and some pleasure out of driving it on vacation, well, it makes sense to buy that new car. The same thing is happening to education.

LEHRER: But it's been -- has it been -- I mean, a lot of times, just to pick up on your point, that college diploma has been seen as a meal ticket; it's a way to get a job. Has that been a mistake, to tell young people that not only status but just a way to get a good job and have economic status, you've got to have a college education?

Dr. FROOMKIN: It is not necessary to have a college education to have economic status. Artists and other people of talent don't have a college education. The other thing which I wanted to point out to you, that we have greatly overemphasized returns from education. The lifetime earnings of a college graduate in the '70s was likely to be about 50% more than that of a high school graduate. By 1979-80, his expectations had declined to roughly 25%.

LEHRER: Now, why?

Dr. FROOMKIN: Because college graduates are getting less prestigious jobs; they are pushing out people who only have part of a college degree, and their incomes are declining. Professor Freeman, in his book The Overeducated American, built a model to show to you how those things happen.

LEHRER: Well, what about the pressure downward? I mean, the fact that college graduates are having trouble getting jobs, meaning they're taking jobs that once went to people who did not have college degrees. Can you carry that on further down for me?

Dr. FROOMKIN: Well, basically what has happened -- and my group has done a number of studies on that -- there is practically no differentiation in earnings between people who just graduated from high school and started working right after high school and those who took vocational or technical courses or stopped out of college after two or three years. Those incomes have converged completely. And the type of jobs are getting to be practically indistinguishable. Only in the case of women, there's somewhat better white collar jobs accrue to those who have had some more education.

LEHRER: Do you think, as a result of what has happened in the '70s and now is continuing in the '80s, that there's going to be a permanent shift, that some of these jobs that were once considered that you didn't have to have a college degree for will now become jobs that you must have a college degree for to have and to hold?

Dr. FROOMKIN: You know, probably they will, because college graduates or people with more education than the next claimant usually go to the head of the queue when they're employed.

LEHRER: So we're talking about a permanent change?

Dr. FROOMKIN: I think so.

LEHRER: Thank you. Robin?

MacNEIL: Dean Lindquist, what is your answer to all this? Is it that simply too many young Americans are now going to college, or too many are going with expectations that it's going to lead to a very much better kind of job?

Dean LINDQUIST: Oh, I would disagree with Commissioner Froomkin in that the Census Bureau just released a study that the lifetime expected earnings could be 40% greater for the college graduate rather than 25%, and I would also say that I have never yet realized what a baccalaureate in philosophy or art history expects to do in terms of professional relationships. So when you lump the humanities together in terms of all college graduates from engineering or business in terms of their expectations and careers, I think that's unrealistic. But I would contend, too, that students who have been what they call "sliders" -- kids that have just wandered through school aimlessly for four years and earned a degree, and got a third-class education at a second-class school and then want a first-class job, that 20% dropout is not unrealistic.

MacNEIL: Would you agree with that, Professor Freeman?

Prof. FREEMAN: Well, yes. There's clearly an incredible difference in the kind of quality of education and the people who are most motivated and who take the more vocational courses have clearly done better in the job market.

Dean LINDQUIST: Well, I would disagree with that too, to the extent that our studies indicate that, 10 years out, the difference between the high-priced engineer and the successful liberal arts graduate is almost insignificant. It's just two or three points in terms of salaries.

Prof. FREEMAN: But that's only for the people who have jobs in big companies.

Dean LINDQUIST: In part that's true, but are they not the best-paying anyway?

MacNEIL: Come back to my basic question. Is this country encouraging or permitting, or whatever the word is, too many young people to go to college?

Prof. FREEMAN: I don't think so.

MacNEIL: Let me ask Professor Freeman first.

Prof. FREEMAN: I don't think so. I mean, we should open the door for people. They should be permitted and, indeed -- perhaps not encouraged to come through, but they should be offered some help in getting through college, and they just have to be aware of the fact that it is no longer the meal ticket it used to be.

MacNEIL: Dr. Froomkin, what's your view of that? Are too many Americans going to college, spending a lot of money and a lot of time?

Dr. FROOMKIN: I don't think that too many Americans are going to college.What is happening is that this college-going experience is becoming a lottery, and being in a polition to stop people from getting a ticket to that lottery and getting some hope for a good job would be a very cruel and unproductive policy.

MacNEIL: Let me ask Mr. Nealon, and then go back to our experts here. Do you think -- do a lot of young people you know, or do you think a lot of young people will now figure, and their parents, it isn't worth the effort, and there will be a lot fewer people -- when this begins to become generally realized that a college degree won by a lot of money and hard work doesn't necessarily lead to a much better job, a lot fewer people will be going and college admissions will go down?

Mr. NEALON: I would say yes, but in my case, I didn't pursue college or had no interest in college right out of high school. It was only until I was aware that it was required in terms of my profession that I took an interest and then started pursuing an education.

MacNEIL: Would you expect, Professor Freeman, as this word gets around that there will be a big dropoff in college application?

Prof. FREEMAN: Well, I think you've already seen a dropoff in college applications. If you look at the number of freshmen going into college as a fraction of the population, say, 18-19. Among young men -- that was about 45% in 1970. It's somewhere around 34% today. That's already declined.

MacNEIL: Do you have a prediction on this, Dean Lindquist, that there'll be a cause and effect --

Dean LINDQUIST: I think there's a qualitative difference. I fully expect that some of the second-rate colleges are going to go out of business, but I think the better institutions around the country are just going to be more attractive than they've ever been in the future than even currently.

MacNEIL: Thank you. Dr. Froomkin, what's your opinion on that?

Dr. FROOMKIN: There is going to be some decline in the rate of college-going, especially among men, but women have been going to college in increasing numbers and they have become more and more active in trying to seek out professional jobs, management jobs, etc. The proportion of women with bachelors degrees who have management jobs has doubled in the past 10 years, and I think that they will serve to prop up the enrollments for a good long time to come.

MacNEIL: Well, we have to leave it there this evening. Dean Lindquist, thank you very much for joining us in Chicago, Dr. Froomkin in Washington, Professor Freeman, Mr. Nealon, in New York. Good night, Jim.

LEHRER: good night, Robin.

MacNEIL: That's all for tonight. We will be back on Monday night. I'm Robert MacNeil. Good night.